Medicare Seeks To Limit Number Of Seniors Placed In Hospital Observation Care

KHN: May 5, 2013

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Medicare officials have proposed changes in hospital admission rules that they say will curb the rising number of beneficiaries who are placed in observation care but are not admitted, making them ineligible for nursing home coverage.

“This trend concerns us because of the potential financial impact on Medicare beneficiaries,” officials wrote in an announcement April 26. Patients must spend three consecutive inpatient days in the hospital before Medicare will cover nursing home care ordered by a doctor.

Observation patients don’t qualify, even if they have been in the hospital for three days because they are outpatients and have not been admitted. They also have higher out-of-pocket costs than admitted patients while in the hospital, including higher copayments and sometimes paying exorbitantcharges for non-covered drugs.

Under the proposed changes, with some exceptions, if a physician expects a senior will stay in the hospital for less than two days (or through two midnights), the patient would be considered an outpatient receiving observation care. If the physician thinks the patient will stay longer, the patient would be admitted. Setting deadlines for observation stays would also limit the growing length of time of observation visits, another trend officials said was troubling. Read more